Correlation Between Electronic Arts and CI GAMES
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and CI GAMES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Electronic Arts and CI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and CI GAMES SA, you can compare the effects of market volatilities on Electronic Arts and CI GAMES and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Electronic Arts with a short position of CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and CI GAMES.
Diversification Opportunities for Electronic Arts and CI GAMES
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electronic and CI7 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA and Electronic Arts is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Electronic Arts are associated (or correlated) with CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of Electronic Arts i.e., Electronic Arts and CI GAMES go up and down completely randomly.
Pair Corralation between Electronic Arts and CI GAMES
Assuming the 90 days horizon Electronic Arts is expected to generate 0.22 times more return on investment than CI GAMES. However, Electronic Arts is 4.62 times less risky than CI GAMES. It trades about 0.09 of its potential returns per unit of risk. CI GAMES SA is currently generating about 0.01 per unit of risk. If you would invest 12,663 in Electronic Arts on October 18, 2024 and sell it today you would earn a total of 1,113 from holding Electronic Arts or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. CI GAMES SA
Performance |
| Timeline |
| Electronic Arts |
| CI GAMES SA |
Electronic Arts and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and CI GAMES
The main advantage of trading using opposite Electronic Arts and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, CI GAMES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CI GAMES will offset losses from the drop in CI GAMES's long position.| Electronic Arts vs. Singapore Telecommunications Limited | Electronic Arts vs. Casio Computer CoLtd | Electronic Arts vs. PLANT VEDA FOODS | Electronic Arts vs. INTERNET INJPADR 1 |
| CI GAMES vs. Nintendo Co | CI GAMES vs. Nintendo Co | CI GAMES vs. Sea Limited | CI GAMES vs. Electronic Arts |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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